HumbleBundle sells music a different way

HumbleBundle, a San Francisco start-up that's sold millions of dollars of computer games over the last two years, is now entering the music scene.

What's unusual about HumbleBundle is that it lets buyers name their price -- any price at all as long as it's at least a penny. That's right: one cent.

The current sale involves six downloadable albums from They Might Be Giants, Jonathan Coulton, Christopher Tin, Hitoshi Sakimoto and MC Frontalot, with bonus tracks from OK Go.

At that price, one would expect HumbleBundle to be bleeding cash. But it's not. Its founders, John Graham and Jeffrey Rosen, assure that their company is in fact profitable.

To see how, let's take a look at how well the albums are selling, courtesy of a real-time dashboard of the bundle's progress. As of Thursday morning, the music bundle generated more than $338,000 in total sales from 40,996 buyers who spent an average of $8.25 each.

Customers who use the Linux operating system are the most generous, paying an average of $11.93, followed by Mac users who averaged $9.77 per purchase. Windows users came in last, paying just $7.41 per person. However, by total revenue, Windows customers made up the vast majority of sales, followed by Mac users, then Linux. Bundles are generally only available for 10 to 14 days, and the music bundle sale ends Aug. 10.

The dashboard also lists the top 10 buyers and how much they paid, adding a slight competitive element to those who want to be generous and feel like a patron of the arts. So far, the largest amounts paid for the music bundle is $400 by the indie developers of the ZombiesRuns game, followed by $350 from MetaFilter, a community weblog.

"These people know that if you like awesome content, it has to come from somewhere," said John Graham, co-founder of HumbleBundle. "They know they're forging a long-term relationship with the content creator."

So while there may have been plenty of penny pinchers who took advantage of the name-your-price bundle, there were far more people who went the other way, Graham said, thereby bumping up the average.

For those who have a Hobbesian view of their fellow human, here's another surprise. HumbleBundle also lets people decide how much of their money goes to the artists, how much to charity and how much to HumbleBundle itself. A buyer, for example, can put all of the money to charity, which for this bundle are the Electronic Frontier Foundation and Child's Play.

For artists, money generated from the sale is regarded as gravy, but with a bonus -- they also get to feel good about themselves.

"As an artist, it's a great way for me to introduce my music to a new audience, while at the same time raising money for some charities," said Tin, whose "Calling All Dawns" album won two Grammy Awards in 2011. The album is among the six included in the Humble Music Bundle.

Typically, buyers like to give 65% to the artists, 20% to charity and 15% to HumbleBundle as a "tip," Graham said.

"For the model to work, all we need is to put in the equivalent of a cup of coffee," Graham said. "As long as we can keep people somewhat generous to the tune of $5 or more, it's an awesome system."